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He said the technology solves a major problem encountered by oil producers around the world and has drawn interest from Saudi Arabia, the world’s leading oil producer, as well as China’s big national oil companies and such Western companies as Chevron Corp., BP PLC and Royal Dutch Shell plc.

Mr. Zhang hopes that one day Veritas will be big enough to compete with major oil services firms like Halliburton, Baker-Hughes Inc. and Schlumberger Ltd.

As with Veritas, China’s government nurtures “national champions” in other areas it targets for development and protects those firms from U.S. competitors that could easily squash the budding enterprises.

“Protectionism is a huge problem,” said Alan Turley, a vice president of FedEx Express in Hong Kong. He said the government is seeking to establish a Chinese competitor to replicate the delivery firm’s unique air-courier service and is putting obstacles in FedEx’s way, contending that the U.S. company doesn’t have enough competition.

Sometimes the government’s help for domestic industries comes in an unusual form.

The government pressured Google to exit the mainland and prohibits Facebook from operating there because both companies refused to accept Chinese censorship rules. While Westerners viewed the social media firms as persecuted and heroic, Chinese officials contend they deserved what they got because they refused to play by the rules.

Now, China is nurturing its own enterprises, Sina.com and Weibo, a Twitter-like service, to take their place.

Tong Chen, the chief editor at Sina, an Internet portal and news outlet with an enviable 500 million users, said the government’s occasional censorship of debate on sensitive issues proved to be a blessing in disguise for his company.

“If not for censorship, maybe Sina would have to compete with the big media, and the U.S. would invade the market just like it did in Taiwan and Japan,” he said. Sina Corp. is the only Chinese media company whose stock trades on the U.S. Nasdaq stock market.

Fatal attraction?

Still, the lure of China’s vast consumer market and low labor costs can be irresistible for American technology firms considering establishing a presence in China, even if it means having to share trade secrets or accept rules they don’t like.

Francisco Sanchez, undersecretary of commerce for international trade, made the rounds in China last month with a delegation of 19 biotechnology firms, including Amgen Inc. and Applied Science Associates Inc.

The delegation announced a $2 million deal to market American cervical cancer tests in China through a joint venture between California firms DiaCarta LLC and Kodia Biotechnology Co. Ltd. and Henan Kelong Medical Apparatus & Instruments Co. Ltd., a Chinese firm.

China’s biotech sector is growing at roughly 25 percent a year, so it makes sense to bring the products and services of U.S. companies to China to help meet the demand,” Mr. Sanchez said. “This sale will not only help an American company prosper and hire more people, but it will also help China benefit from world-class, cutting-edge American technology.”

While publicly trumpeting such deals, many American executives privately complain that they are being coerced into transferring technologies and divulging trade secrets, and remain vulnerable to spying by Chinese firms and agencies seeking to replicate what they do.

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